More broadly, the recent interest in bitcoin exchanges could well be part of a larger attempt to
deflate asset bubbles.
For example, a reduction in capital inflows can
deflate asset bubbles and so discourage consumption through wealth effects, or such a reduction can lower consumption by raising interest rates on consumer credit, or even by encouraging stronger consumer lending standards.
2018 Outlook: Will Inflation
Deflate the Asset Bubble?
Not exact matches
The U.K. takes it so seriously that it invested the Bank of England with the power to
deflate any
asset - price
bubbles that it identifies as threats to the financial system.
Treasury yields have been rising not because of rising risks but because the
asset bubble in bonds is
deflating, inflation is rising, and investors are demanding more yield.
It has often been couched in terms of using monetary policy to prevent or
deflate asset - price
bubbles — perhaps to dampen irrational exuberance in stock markets.
There is no single entity that is in charge of
deflating the
asset - price
bubbles that turn into busts if left unchecked.
[1] Denmark's overleveraged banking system, with banking
assets as a percentage of GDP at 454 % versus the U.S.'s 90 %, will experience unimaginable pain when the country's housing
bubble deflates in earnest.
But when the
bubble pops, and things are ugly, governments will try to resist the
deflating bubble — favoring relatively well - off
asset owners over not - so - well - off taxpayers.
Following the dot - com stock market crash and the
deflating of the equity securities
asset bubble, many investors need to make cost cutting and investment tax reduction a much higher priority.
He famously stated that it would be easier to clean - up the mess after an
asset bubble pops than to try and
deflate the
bubble on the way up.
That's bad news for investors chasing
bubble assets like Bitcoin and overvalued technology stocks, which are very likely to
deflate, as was the case...
According to the update, while bitcoin was uncorrelated to other
asset prices at year - end 2017 during the rally, ever since the
bubble has begun to «
deflate» in the new year it's more closely correlated with other risk
assets such as stocks.